Property industry confidence remains at a near-record low level, despite a 14-point improvement in sentiment since the previous quarter. Read our state-by-state roundup.
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Three key takeaways from the latest ANZ/Property Council survey:
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The latest ANZ/Property Council survey, a quarterly litmus test of the industry’s confidence, posted a score of 76 – well below the 100-point benchmark considered neutral.
National confidence levels for the September 2020 quarter are well below the historical survey average of 126.
A total of 955 industry participants responded to the online survey between 15 June and 1 July – before the six-week lockdown was imposed in Melbourne.
“These results show the property industry – employing more than 1.4 million Australians – remains on coronavirus-induced confidence rollercoaster,” says Property Council chief executive, Ken Morrison.
National forward work expectations are negative for the second consecutive quarter, although increased from -22 to -8. National staffing level expectations are also negative, although they increased by 7 index points to -9.
National economic growth expectations are at -67 index points, the second-lowest level in the history of the survey, and negative for the fourth consecutive quarter.
ANZ senior economist Felicity Emmett says the impact of COVID-19 has been widespread across all states and sectors.
“Not surprisingly, the tourism sector has been the hardest hit, although office property expectations have deteriorated further over recent months as businesses reassess the long-term outlook for office space.”
Sixty per cent of respondents believe the future impact of COVID-19 on their business will improve over the next three months, 24 per cent believe there will be no change, and 16 per cent believe impacts will get worse.
Emmett says government support has been “clearly important”, pointing to the HomeBuilder scheme which “seems to have hit the mark”. Around 60 per cent of firms operating in the residential sector reporting that it will have a positive impact on their business.
“With the outlook still challenging, the economy is likely to need more stimulus in coming months,” Emmett says.
Victoria
Confidence in Victoria had improved slightly, up 71 from 61 the previous quarter. But the survey was conducted before the state experienced a resurgence of new COVID-19 cases. As Victoria’s economy accounts more than one-fifth of GDP the consequences of the lockdown are likely to be nationally significant. Property Council Victorian executive director Cressida Wall says government has an essential role to play in “shepherding the property industry through the COVID crisis”.
New South Wales
NSW property industry confidence has increased 11 index points from 65 to 76 over the quarter. Property Council NSW executive director Jane Fitzgerald is cautious, with forward work schedule and growth expectations in negative territory and staffing levels down from -11.4 to -12.1 – the lowest on record “It is clear that we aren’t out of the woods yet.”
Queensland
Confidence levels in Queensland improved slightly, up to 71 index points from 58 the previous quarter, but down from the pre-COVID confidence level of 119 points in March 2020. Queensland also has the lowest expectations for state economic growth over the next 12 months. Property Council Queensland executive director, Chris Mountford says this underscores the “strong role for state and local government to play to stimulate activity through the right policy settings”.
Australian Capital Territory
ACT property industry confidence has lifted to the highest level in the country – increasing from 64 to 94 over the quarter – but remains well below the high of 144 points in December 2019. Property Council ACT executive director Adina Cirson says forward work schedule expectations are “pleasing”.
South Australia
Statewide confidence sits at 86, lifting 26 points since last quarter. “It’s going to take some time to return to pre-COVID confidence levels, but the current trajectory gives reason for cautious optimism,” says Property Council SA executive director Daniel Gannon.
Western Australia
Sentiment across the WA property industry is the second-most positive in Australia, rising to 82 points for the September quarter, up from 63 points in June. “The response of Premier Mark McGowan’s State Government to the crisis has been decisive and effective, ensuring the WA property industry is best placed to recover and retain jobs,” says Property Council WA executive director Sandra Brewer.
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